HONG KONG’S PICC HK RATED EXCELLENT - AM BEST

KUALA LUMPUR, July 22 (Bernama) -- AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of The People’s Insurance Company of China (Hong Kong) Limited (PICC HK).

In a statement, the global credit rating agency said these credit ratings (ratings) which have a stable outlook reflected PICC HK’s balance sheet strength, was assessed as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

The ratings also reflect the strategic importance of the company to its parent, The People’s Insurance Company (Group) of China Limited (PICC Group), as the sole overseas insurance entity and a key component of PICC Group’s overseas strategies.

PICC HK’s risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio, remained at the strongest level at year-end 2023.

The company’s investment portfolio remains well-diversified, with the majority of its assets allocated to investment-grade bonds, cash and cash equivalents, and preference shares, while the remainder is in listed equities and other investments.

With an increasing proportion of liquid invested assets, PICC HK has maintained a strong liquidity position, and other supporting factors include a strong regulatory solvency position, both under the legacy Hong Kong Insurance Ordinance and Hong Kong’s new risk-based capital regime.

PICC HK’s operating performance remains adequate, in which it returned to profitability last year, with net earnings mainly supported by robust investment income owing to its diversified investment portfolio. In 2023, PICC HK achieved positive underwriting results, driven by its profitable inward business.

The company’s business profile is assessed as limited, whereby its underwriting portfolio is exposed to moderate concentration risk in terms of sourcing premium revenue from its affiliated company, PICC Property and Casualty Company Limited, despite the stable profit margin.

PICC HK established its Macau branch in 2022 to better satisfy insurance demand from Portuguese-speaking countries of the world, as well as to provide one-stop general insurance solutions covering mainland China’s greater bay area, Hong Kong and Macau.

-- BERNAMA